ITS Lending, a real estate lending crowdfunding portal dedicated to the regeneration of Italy’s boroughs, in less than a year since its launch in November 2021, has repaid six loans, returning a total of €265,000 plus accrued interest, and closed 20 campaigns for €1.2 million.
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Real estate lending crowdfunding on the rise
At a time of economic uncertainty such as the current one and the difficulty for retail investors to identify profitable investments, real estate lending crowdfunding stands out as a profitable and in-demand investment.
According to data from Crowdfunding Buzz, the segment grew by 61 percent in the first 8 months of 2022, compared to the same period in 2021, raising €56 million, for 202 financed real estate projects. The average funding also grew (from €220,000 per transaction in 2021 to €278,000in 2022) and so did the investors, who, if in August 2021 there were about 22,000, in the same period this year there were 35,000. The average gross loan remuneration rate of about 10 percent on an annual basis is probably one of the reasons for the success, combined with the average loan term of just under 12 months.
The specificity of ITS Lending
ITS Lending, one of the latest among real estate lending crowfunding platforms, is the only one focused on real estate projects strictly related to the regeneration of small Italian villages. These are almost always small renovation projects that have, therefore, very low requirements. The size of the loans offered on the platform is in fact almost always between €20,000 and €100,000, with a very short duration, between 6 and 12 months. This allows investors a high rotation of their portfolio and, at the same time, an alternative asset class compared to the lending crowdfunding industry itself.
The portal also offers a degree of security: the properties to be renovated have already been acquired by the real estate company proposing the opportunity, and a final buyer is always identified before it is presented on the platform, who advances a deposit. If the purchase is waived, additional mechanisms will be activated to secure the investment, including a willingness on the part of the real estate company receiving the loan to still repay principal and interest within the stipulated terms.
ITS Lending’s achievements in its first 10 months
The portal has so far closed 20 real estate transactions, in southern and central-northern Italy, for a total collection of €1.2 million and an average of 24 investors, who contributed an average investment of €2,000 and an average gross rate on an annual basis of 9.3 percent.
The loans repaid to date are 6, all within the predefined timeframe, and concern structures for residential use, small and medium-sized (two- or three-room apartments), two of which are located in Sicily, two in Tuscany, and two in Puglia, where the loan for the intervention on a building in Caprarica di Lecce was repaid most recently.
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First published in Crowdfunding buzz, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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